Purdah, dowry and development in Pakistan

Transcription

1 Purdah, dowry and development in Pakistan Ian Coxhead University of Wisconsin-Madison Sisira Jayasuriya Monash University

2 Purdah Purdah refers to a set of practices that regulate women s dress, behavior, and social activities, especially outside the family home. Importantly, purdah limits a woman s ability to seek paid employment outside her home or immediate locale. Purdah is (now) very widely practiced in Pakistan Women s LFPR is among world s lowest Minimal willingness/capacity to relocate for work Est d elasticity of women s labor supply w.r.t. wage is 0.16 (cf. Bangladesh: 0.31; Sri Lanka: 0.89; Lopez-Avecedo & Robertson 2016) 1

3 Dowry Dowry is a payment made at marriage by the bride s family to that of the groom Reflects (in part) gender-differentiated earning power Banned or restricted everywhere in South Asia, yet persists Major financial burden on families Cause of widespread abuse and violence against women, including sex-selective abortion, female infanticide, and murder 2

4 Globalization disappoints in Pakistan s, significant lowering of barriers to trade & factor flows Average applied tariff rate was > 70% in 1985; 56% in ; 20% in ; 14% in 2014 But failure to gain from globalization Export growth very sluggish chronic trade deficits FDI: very little, almost all to home mkt (services, non-tradables) Employment growth very low Industrialization stagnant (or de-industrializing) Exports of labor, rather than of goods and services 3

5 ,25 Per capita income ($PPP) as fraction of USA (Source: World Bank data) 0,2 0,15 0,1 0,05 0 Pakistan India Bangladesh Low & middle income Vietnam Cambodia 4

6 Manufacturing, value added (% of GDP) Bangladesh India Pakistan Vietnam Cambodia Sri Lanka 5

7 No boom in labor-intensive apparel exports 6

8 Anaemic growth in all mfg exports 7

9 Explaining disappointing outcomes Poor performance is overdetermined Laundry list Opening to global markets coincided with rise of China Political instability and poor infrastructure discouraged FDI Inadequate logistical services & institutional support Insufficient skilled labor Negative dynamic with labor export and remittances Hamid and Khan, 2015; Nazeer and Rasiah, 2016; Mangla and Din, 2015; ul Haque, 2015, Mahmood and Ahmad 2017 None of these are unique to Pakistan yet it lags behind comparable countries 8

10 Low female LFPR and mobility are more special Ex ante: Purdah reduces effective labor force and contributes to low labor productivity Persistent misallocation over sectors and occupations Lower potential for industrial expansion Lower incentives for investment and technological upgrading Dowry may exacerbate existing resource misallocations Labor export and remittance dependency Institutions not the cause of dev. failure, but may exacerbate costs 9

11 Labor force participation rate, female (% of female population ages 15+): modeled ILO estimate Bangladesh Indonesia India Pakistan Turkey 10

12 Source: ADB

13 Source: ADB

14 Features of female employment Urbanization rate is high but female LFPR (paid employment) is even lower in cities Almost no Pakistani women work in Middle East Women work in farming (71%), at home, unpaid Employment U-curve: only the poorest & most highly educated are in paid work Women s employment in industry (14%), including apparel mfg, is very low (Makino 2007) In textile and apparel the most female labor-intensive industry Pakistan has lowest share in South Asia (World Bank, 2016) 13

15 Female employment in formal mfg firms (share) (Source: calculations from national data in World Bank 2016) 14

16 Low female LFPR and mobility: implications Specific factors model (SFM) (Jones 1971) 2-sector economy w/ vertically integrated agr. (A) and mfg (T) Both A & T subject to exogenous world prices Production technology: mobile labor and specific capital Counterfactual: full L mobility: Y T = Y T (L L A, K T ) Y A = Y A (L A, K A ) L T + L A = L m + L f = L Purdah: only L m mobile; L f employed only in A: Y T = Y T (L L f L Am ; K T ) Y A = Y A (L Am ; K A, L f ) Differential responses to price shocks: Le Chatelier-Samuelson 15

17 Production possibilities and globalization gains with/without restrictions on female labor mobility Agriculture P 0 P 1 A PPF with restrictions C PPF w/o restrictions B 0 M A M C M B Industry Initial long-run equilibrium with prices P 0 is at A. Counterfactual (full L mobility): relative price increase to P 1 raises output of industry, new eq m at B Purdah (some L fixed in agriculture): same price increase less growth in industry output, new eq m at C Counterfactual industry growth is (M B M A )/ M A ; purdah growth is lower at (M C M A )/ M A GDP gain is measured by x-intercepts of isovalue lines with slope P 1 relative to one of same slope through A Wage gap widens in purdah case due to declining real returns to specific factors in agriculture 16

18 Key parameters of the purdah effect In SFM, using proportional change form, e.g. x = dx/x With sectoral output and price changes y j and p j we have: where y j = σ j(1 θ Kj ) θ Kj ε Lk p j p k, j k σ j = elast of factor substitution; θ Kj = cost share of specific factor; ε Lk = λ Lk e Lk /(λ Lj e Lj + λ Lk e Lk ) = own-price elasticity of L demand (e Lk ) weighted by sectoral employment share (λ Lk ) Le Chatelier-Samuelson: y j p j p k (Note: same outcome as when σ j 0) 0 as θ Kj 1 PPF more concave Ordering of factor & output price changes in SFM: magnification effect: if industry s price rises, real return to ag. specific factor falls These parameters define an agenda for empirical research 17

19 Alternative (stronger) statement of the model Agriculture P 1 P 0 B A PPF with restrictions PPF w/o restrictions 0 T 1 C T 0 D Industry T 1 < T 0 (C); GDP 1 < GDP 0 (D); P 1 < P 0 (RER depreciation) ; (Y N /Y T ) 1 > (Y N /Y T ) 0, i.e. 0B > 0A; + supply response T/ P T! 18

20 Economic consequences of purdah In vertically integrated agriculture: Feminization of work deepens (>70% of females work in ag) Returns to sector-specific labor are lower than counterfactual Lower incentives to adopt labor-augmenting technologies except in traditionally male activities such as land preparation In vertically integrated industry: Lower int l competitiveness; less FDI, lower growth Men s outside option (labor export) may exacerbate (real exch. rate effect, reservation wage) Sabir and Aftab 2007, women s wage gap growth 19

21 Institutional dynamics of purdah and dowry: macro version Purdah lowers women s labor productivity and returns to investment in women s human capital Gender wage gap increases demand for dowry 20

22 Dowry in Pakistan Practiced by 97% rural HHs, 87% all HHs (Anderson 2007) Payment restricted by law to ~$300 but most estimates are many multiples, about 1-2 years HH income 1.13 (rural) to 1.23 (urban) X annual HH income (Anderson 2005) In rural Punjab, average is ~$1800 (Makino 2017) Pakistan has highest dowry death rate in S. Asia Official: 2.45/100,000 women Unofficial: up to 16/100,000 21

23 Dowry, labor export and purdah Hypergamy ( marrying up ) has strong social and economic justifications; dowry is a cost (Rao 2012) Labor export to raise dowry: both compulsion and incentive Ruinous impact of many daughters on HH econ status (White 2017) Indian HHs with higher F/M child ratios save more (Horioka and Terada-Hagiwara 2016) Pakistan: 5% of HHs send (male) workers to Gulf; remittances are biggest single source of export revenue 22

24 Dowry demand promotes labor export (Cheema & Coxhead, 2018) Multinomial logit: migration choice (omitted: no migration) Household dowry dependency ratio: girls & young women working age men + 1 Ave. marginal effect, DDR: Domestic mig: 0.5pp (5%) Foreign mig: 0.5pp: (10%) Domestic Foreign Coeff. z Coeff. z Ln. dowry dep. ratio *** (7.58) *** (3.32) Ln HH head age *** (3.67) (0.24) Ln HH size *** (-10.44) *** (-4.43) Ln dep. ratio ** (2.64) (1.29) Owns livestock (-1.85) (-1.45) Ln land value *** (4.02) ** (3.11) Ln migrant density *** (9.34) *** (11.2) Rural *** (6.94) (-1.20) Constant * (-2.04) (1.16) Data: PSLM N=15,806. Standard errors clustered at stratum level. Pseudo-R2: Omitted from table: education dummies, province dummies. 23

25 The bad dynamics of purdah, dowry & development Purdah erodes comp. advantage in L-intensive industry by restricting female participation in wage labor Equivalent to reducing the effective labor endowment for manufacturing and modern services Labor force growth leads to growth in home market-biased goods, low-productivity services and male labor export Hence instead of expanding labor-intensive manufacturing and generating productive employment, Pakistan is deindustrializing and growth is stagnating Low growth may impede efforts to reduce/abolish dowry 24

26 Institutional dynamics of purdah and dowry: micro version Dowry as compensation for earnings differentials (& see Makino 2017) Dowry may incentivize purdah 25

27 From stylized facts and models to hypothesis tests Can we understand drivers of change in purdah prevalence, intensity, or impacts? Micro questions, e.g.: do labor market shocks induce changes in seclusion? Direct data on dowry and purdah are very hard to obtain (Anderson 207; Makino 2017) But PLSM survey has Female questionnaire incl. questions about HH decision-making over employment, etc. Macro questions, e.g. how big is the seclusion penalty? Underidentification challenge Cross-country comparisons are revealing as casual empiricism, but can they yield estimable models? 26

28 Meta-analysis: the need for context Micro-development analyses always benefit from context In this work we try to draw connections between micro issues and their macro environment In doing so, we perceive a variety of important questions that haven t previously been asked Often, because to do so requires boundary crossing Cf. recent developments on resource booms and Dutch Disease; on trade, labor and distribution, and similar areas There are many such micro-macro gaps in the development literature; to explore them will at least make the micro work better! 27

29 Thank you Questions/comments: 28